Swan dangles $500bn mining tax lure

The government will introduce its resource rent tax legislation – and a multibillion-dollar package of tax cuts and reforms – into Parliament next week, promising the change will boost voters’ savings by $500 billion and hoping the package passes the lower house by Christmas.

Treasurer
Wayne Swan
confirmed yesterday the technical details of the tax had been finalised in the past three or four days.

“We’d like to get it through the House of Representatives as quickly as we can. I would like to get it through by the end of the year".

But the government must still finalise negotiations with the crossbenches and the Greens, who yesterday foreshadowed amendments and whose support is critical to the legislation’s passage through the Senate.

Independents
Rob Oakeshott
,
Tony Windsor
and
Andrew Wilkie
have not committed to supporting the laws, while West Australian National
Tony Crook
is steadfastly opposed. Queensland MP
Bob Katter
said he was open-minded and would push for some amendments.

Related Quotes

Company Profile

The Greens have laid the first markers, saying the government must wipe out $4 billion worth of tax cuts for the big four banks and deliver a more generous package to small business, the nation’s biggest employer.

This came as National Australia Bank yesterday unveiled a full-year cash profit of $5.5 billion.

“The Greens will be proposing to the Treasurer that the banks do not get the cut in corporate tax to 29 per cent," Greens leader
Bob Brown
said.

“Instead, small businesses, which employ more than half of Australia’s workforce, should be supported with a 5 per cent tax cut to 25 per cent."

If the big three mining companies get any extra benefits, the Greens have also said they may push for gold to be included and for a higher levy.

After almost 18 months of warfare over the tax, the government will now start pushing harder to sell its positive benefits for the rest of the economy,

As Europe grapples with rescue packages and the US unemployment rate soars, the government instead is seeking to deliver benefits to the nation’s 11 million workers from the mining tax revenue. The tax is forecast to bring in $11.1 billion in its first three years.

“The revenue from the [minerals resource rent tax] will be spread right around the country, spread right around the country by giving a boost to superannuation savings, spread right around the country by giving a very significant tax cut to 2.7 million small businesses,"Mr Swan said yesterday.

The Treasurer said the super savings of Australians would be boosted by $500 billion by 2035.

Raising the superannuation guarantee to 12 per cent from 9 per cent will lead to an average worker aged 40 reaping an extra $56,000 in re­tirement. An average worker aged 30 would gain an extra $108,000 in retirement and an average 18-year-old would gain an additional $205,000.

The government faces a tight time-frame with the legislation expected to be at the printers as early as today in order to scrape into the House of Representatives’ final three weeks of the year.

The Senate will not look at the legislation until next year, but companies have already started to adjust their accounting standards to take account of the iron ore and coal ­profits tax.